I'm pretty sure Xbox Live removed that feature from Silver.
SON OF A-!!!! I knew thats what was likely the case, I guess I need to go online/stay in the XBL loop a little more

well, Microsoft wins this round, I'll buy a 12 month card and after that runs out I'm done since I'll either be in the military or college by then. Unfortunate you now have to pay the full price of all the XBL features even if all you want to do it private chat ONE person. Its like all the Microsoft pigs in suits gathered around a big table in their "league of evil" headquarters and thought to themselves: "whats something else we can take away from silver users?" and then one of their goons says: "How about private chat? That way they have to pay just to talk!" obviously everyone then agreed, the goon got a promotion, and all those greedy bastards lived happily ever after while Silver users now have to pay to upgrade to Gold just so they can do more than scroll through advertisments on their dashboard.
Ok, so maybe its not THAT big of a deal and its probably old news but its new to me and I daresay I am thouroughly dissapointed :dry: a lot of screwing over of customers going on with corporations these days...or maybe its always been happening I just notice it more now, either way not cool MS....not cool.... :stare:
Edit: I mean, I can always talk to people over the phone or Facebook chat or something when I play if I absolutely have to but I just figured, well, I dont know, maybe since I payed money and bought one of their headsets that maybe they could let me use it? Or maybe I'm just asking too much...or maybe I'm just really tired and I seem to keep rambling on, probably a mix of both